material adverse change (MAC)


A clause used with mergers and acquisitions that allows the acquiring party to cancel the acquisition in the condition that there is a significant change with the target company. This clause allows the acquiring party to be protected if something negative happened to the target company which made the acquirer no longer interested in purchasing the company. also called material adverse effect or material adverse event.

Use this term in a sentence

You should always try and add a material adverse change clause so that you have some flexibility in the deal.

​ Was this Helpful? YES  NO 5 people found this helpful.

Based on the clause in their loan agreement, they were able to cancel it due to the material adverse change clause that was present.

​ Was this Helpful? YES  NO 8 people found this helpful.

Even though I was hoping to follow through with the proposed merger, the collapse in the price of oil is a material adverse change in conditions which makes the merger no longer financially viable.

​ Was this Helpful? YES  NO 4 people found this helpful.

Show more usage examples...

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
matching strategy material amount